Scarce liquidity in the financial prediction markets run by InTrade-TradeSports

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The Daily DOW prediction markets are thin, and the Daily Nasdaq prediction markets are inexistent.

Here is the data for yesterday.

DOW:

DOW Oct 29, 2007

Nasdaq:

Nasdaq Oct 29, 2007

Previous blog posts by Chris F. Masse:

  • The marketing association between BetFair and TOTE Tasmania works better than expected.
  • The term “event markets” sucks —and the uncritical thinkers using this crappy term suck too.
  • CLIMBING HIS WAY TO THE TOP: Erik Snowberg is now Assistant Professor of Economics and Political Science at California Institute of Technology.
  • Unlike other countries, the United States of America defends the freedom to offend in speech.
  • The best research papers on prediction markets
  • 2008 Electoral Map
  • American Enterprise Institute’s Center For Regulatory And Market Studies (Policy Markets)

6 thoughts on “Scarce liquidity in the financial prediction markets run by InTrade-TradeSports

  1. Niall O'Connor said:

    Yes, it would seem that things must have taken a turn for the worse, since Justin Wolfers and Eric Zitzewitz wrote in “Five Open Questions About Prediction Markets” (page 7);

    “Beyond sports bettors, Tradesports has been quite successful at marketing its platform to those employed in financial markets, a pool of risk-acceptant traders.”

    It would be interesting to see what explanation they could give for this.

    I also noted in that paper that mention is made of a prediction market software company called Incentive Markets; could somebody clarify whether this is the same company;

    “As of Feb 2005, Incentive Markets is no a longer viable company, as stated by Carol Gebert, founder of Incentive Markets, during the Center for Discrete Mathematics & Theoretical Computer Science (DIMACS) Workshop on Markets as Predictive Devices (Information Markets).”

  2. Chris. F. Masse said:

    “It would be interesting to see what explanation they could give for this.” InTrade-TradeSports was fined by the US CFTC for floating event derivatives on commodities.

    Incentives Markets was a bit like Consensus Point or Inkling, a consulting firm and software vendor for internal prediction markets.

    http://www.linkedin.com/pub/0/20/753

  3. Jason Ruspini said:

    I’m not sure why someone would trade in those markets. I mean the answer is high leverage and low fees relative to your account size, but if you can’t fund a regular stock account should you be day-trading these markets??

  4. Niall O'Connor said:

    Yes, it would seem that things must have taken a turn for the worse, since Justin Wolfers and Eric Zitzewitz wrote in “Five Open Questions About Prediction Markets” (page 7);

    “Beyond sports bettors, Tradesports has been quite successful at marketing its platform to those employed in financial markets, a pool of risk-acceptant traders.”

    It would be interesting to see what explanation they could give for this.

    I also noted in that paper that mention is made of a prediction market software company called Incentive Markets; could somebody clarify whether this is the same company;

    “As of Feb 2005, Incentive Markets is no a longer viable company, as stated by Carol Gebert, founder of Incentive Markets, during the Center for Discrete Mathematics & Theoretical Computer Science (DIMACS) Workshop on Markets as Predictive Devices (Information Markets).”

  5. Chris. F. Masse said:

    “It would be interesting to see what explanation they could give for this.” InTrade-TradeSports was fined by the US CFTC for floating event derivatives on commodities.

    Incentives Markets was a bit like Consensus Point or Inkling, a consulting firm and software vendor for internal prediction markets.

    http://www.linkedin.com/pub/0/20/753

  6. Jason Ruspini said:

    I’m not sure why someone would trade in those markets. I mean the answer is high leverage and low fees relative to your account size, but if you can’t fund a regular stock account should you be day-trading these markets??

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